The entertainment vertical in the startup segment has always been a tricky business. With all its subcategories and the difficulty in monetisation and consumer retention, only a few have been able to stay profitable in this endeavor.

In this segment, Indian startups have a lot to learn especially from Chinese startups. Companies like Kwai, ByteDance, BIGO Live, have made their mark as top entertainers in the world.

Although, Indian entertainment businesses follow a rather different model than Chinese ones, the lessons lie in the scaling and monetisation strategies.

In Chindia TMT Conference 2018 by Entrackr, a panel of top entertainment entrepreneurs from both India and China sat down to discuss the various aspects of their businesses.

The panel included Karan Bedi, CEO, MX Player and Prashan Agarwal, CEO, Gaana.com from India, as well as Aviva Wu, VP, Starmaker and John CAI, South Asian Regional Manager, BIGO Live. Priyanka Gill, CEO, POPxo moderated the panel.

Diversity in language and family culture

The initial discussion revolved around the comparison between the content entertainment industry of India and China.

Gaana.com CEO Prashan, like a lot of other speakers, pointed out that the language diversity in India is greater than China and it was important to make the interface more comfortable for the emerging tier II and tier III city based users.

On similar lines, Aviva Wu added how they faced the problem of integrating the fragmentation in user profiles due to diverse languages and cultures on their platform as such a problem did not exist in China where the language and culture is largely uniform.

For BIGO Live, the user base in both the countries differed significantly. In China, the user base belonged to tier III and tier IV cities, while in India 80 per cent users belonged to urban cities.

As per John CAI’s interesting insight, the reason behind this was the family centric culture in India, especially in rural areas, where people focussed on spending more time with the family instead of being occupied on smartphone. This was not a case in urban cities as per him.

Contrastingly, Bedi pointed out that the family culture was an advantage for the television segment, as one TV set would bring the family together.

Paid user acquisition and Monetisation

Moving on, the conversation shifted to paid user acquisition where several crucial differences between India and the world was highlighted in the context of piracy.

As per Agarwal, it was the role of the companies to educate user about the rules and implementing proper policies.

Bedi claimed to have very large existing user base of 175 million monthly active users in India, but he felt the crux of the matter lied in retaining the consumer instead of acquiring one, and during that retention the company also had to follow unit economics.

As far as monetization was concerned all four companies had similar models where Starmaker and Gaana.com relied on paid subscription, and the latter along with MX Player also relied on advertisement and branding based revenue.

Starmaker and BIGO Live also had a model of virtual gifting. Both Wu and CAI agreed that the Indian audience was still getting accustomed to this model, but they had high hopes as it is a successful feature in China.

Gaana.com, with its 100 per cent YoY growth in ad revenue and 50-50 split between ad and subscription income, also felt that the virtual gifting model where users could gift accessories to each other would a be a good start.

Agarwal also pointed out how profiling the users could be a good idea as fintechs are hungry for profiles.

Past and Future

Gill ended up the discussion by asking the panelists about what were the kind of mistakes that they felt could have avoided and what do they predict about the future of their company or industry as a whole.

In hindsight, Bedi and Agarwal both felt that they had made the mistake in structuring their contracts or pricing the content. It is a lesson to learn for all entertainment startups to have confidence in their content and ask for a fair price, and design the contracts relevant to set off into a better future.

Meanwhile, the lesson for Chinese entrepreneurs is to study the diversity and the market better, and also, to collaborate with Indian VCs or counterparts to ease out the process, as mentioned in the VC panel.

Making forecasts, Agarwal said that the music streaming industry will have more than 400 million users through music apps in the upcoming year and Bedi advocated that digital entertainment will be bigger than TV in three years.

For the Chinese players who have recently entered the market, as platforms where content is user generated the future asks for creation of an environment where the number of creators will increase.

It can be seen in the entire conversation how the Indian entrepreneurs and Chinese entrepreneurs, even while operating in different kinds of content segments, faced similar problems and expect similar futures within themselves.

It could be a statement for the industry as a whole and while the difficulties for these players are still concerning, learning from each other’s mistakes, experiences and keeping ahead in the competition would be a fair way to proceed.

About Author

Literature major from Delhi University, I am trying to bring in fresh and relevant perspective in the events occurring in this budding space for entrepreneurs. The time spent working towards bringing across – to our readers – transparent information regarding the companies that contribute to the growth of our startup economy is the most exciting part of being an author at Entrackr.